Oil slips on Syria news, gold slides on Fed tapering

AFP, LONDON

Sun, Sep 15, 2013 - Page 15

Oil sank this week on receding fears of a US-led military strike against Syria, as gold hit a one-month low driven by hopes of an end to US Federal Reserve stimulus.

Investors kept a keen eye on developments in the crude-rich Middle East, as Washington and Moscow discuss a plan to remove Syria’s chemical weapons.

Market expectations are growing that the Fed will begin from tapering its quantitative easing program next week.

The US central bank will hold its key monetary policy meeting on Tuesday and Wednesday.

OIL: The oil market fell on easing worries over a possible strike against Syria, having risen strongly in the previous two weeks due to worries of a potential conflict.

New York crude struck US$112.24 a barrel at the end of last month, the highest level for more than two years.

Although Syria is not a major oil producer, traders are nervous about a broader conflict in the crude-rich Middle East, including Iraq, which is becoming a major exporter.

Russian President Vladimir Putin on Friday said Syria was serious about giving up its chemical weapons, as Moscow and Washington entered a second day of talks aimed at averting US-led military action.

“Oil has shed some 3 percent of its value since Monday as what many perceived to be a flippant remark by US Secretary of State John Kerry last week at a foreign office press conference has lead to what may be a face-saving breakthrough for the [US President Barack] Obama administration in the Syrian situation,” Inenco analyst Joe Conlan said.

Oil was also supported by fresh reports of supply disruptions in crude exporter Libya after the country’s National Oil Corporation on Thursday declared force majeure on three ports.

By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery next month dropped to US$111.90 per barrel from US$116 a week earlier.

On the New York Mercantile Exchange, West Texas Intermediate, or light sweet crude, for this month sank to US$107.58 a barrel, from US$110.16.